Foundation Expenses and Compensation: How Operating Characteristics Affect Spending

by Asmita Barve; Elizabeth T. Boris; George Hobor; Loren Renz; Mark A. Hager

Jan 1, 2006
Questions about how much U.S. grantmaking foundations spend on staff, trustees, overhead, and other administrative expenses -- and how much is appropriate to spend -- are at the forefront of current debates on foundation practices. Over the past several years, stories in the media have spotlighted foundations with questionably high compensation and expenses. In turn, this media scrutiny has prompted action by policymakers to address perceived improprieties. In the foundation field, it has sparked widespread discussion at the national and local levels about what constitutes appropriate practice. Missing from these debates has been adequate information about current practices across a wide spectrum of foundations. This report provides a comprehensive look at expense and compensation patterns of the 10,000 largest independent, corporate, and community foundations (by giving) and documents how major differences in foundations' operating characteristics have an impact on their expense levels. The findings shed light on what factors are tending to drive administrative and operating expenses. Understanding foundations' program strategies and characteristics is key to understanding how much they spend.
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